Arizona faces over 25% cut in Colorado River water amid chip manufacturing boom

Arizona is set to lose more than a quarter of its annual water allocation from the Colorado River following a recent federal decision on managing the river's declining flow. The Colorado River supplies over a third of Arizona's total water needs, making the cut especially significant for the drought-prone desert state. The timing is critical as Arizona has become a central hub for reviving U.S. semiconductor manufacturing, with major chipmakers like TSMC and Intel expanding large facilities there. The region is already grappling with historic water shortages, as evidenced by record-low levels at Lake Mead, a key reservoir fed by the river. The water scarcity poses a serious challenge for chip manufacturing, which is a highly water-intensive industry.